Considering the damning assessment of the operations of the Special Organised Crime Unit (SOCU) as contained in the most recent National Risk Assessment Report, it was somewhat heartening to learn of SOCU’s action to bring about charges against three members of a family alleged to have been involved in money laundering activities. However, questions remain as to why other individuals and/or business entities that may have been the masterminds behind these activities, are also not being investigated and prosecuted. The Unit needs to do considerably more as an anti-corruption body, especially in view of the large number of individuals and businesses that are flaunting unexplained wealth with impunity.
The allegation against the family relates to the transfer of some G$4.1 billion to 22 companies in China. Now that the Chinese Embassy here has offered to provide whatever assistance the authorities in Guyana need to carry out further investigations, one suggestion could be for SOCU to ascertain who are the real owners of these companies and whether any Guyanese national is involved. This is in view of the ease with which nationals from other countries can form companies in China.
In last week’s article, we gave a brief historical background that led to the formation of the Extractive Industries Transparency Initiative (EITI) with headquarters in Oslo, Norway. It is an important international organisation that ‘promotes the open and accountable management of oil, gas and mineral resources’. EITI’s work includes the following main areas: (i) beneficial ownership – who owns and controls extractive companies; (ii) contract transparency – strengthening public oversight of extractive sector agreements; (iii) state-owned enterprises – strengthening accountability of state participation; (iv) commodity trading – shedding light on how oil, gas and minerals are bought and sold; and (v) systematic disclosure – reporting data at source.
We also traced Guyana’s efforts to secure membership of the EITI commencing 2010. However, it was not until 2017 that this became a reality. One of the requirements of the EITI Standard is for member countries to publish an annual report setting out, among others, how licences are allocated; how much tax and social contributions are being paid and where they end up in the government; and how much revenue is being generated, where it ends up and who it benefits. To date, Guyana EITI (GYEITI) has compiled and published three such reports for the years 2017, 2018 and 2019. However, the results reflected significant deficiencies and non-compliance with the EITI Standard, with little or no effort being made to remedy the deficiencies and to implement the recommendations of the Independent Administrator.
The 2020 report was due for compilation and publication by 31 December 2022 but this was not to be, resulting in Guyana’s suspension from the EITI on 17 February 2023. Additionally, EITI member countries are required to carry out Validation every three years to assess compliance with the EITI Standard. One such validation has so far been conducted for GYEITI. However, the results reflected poor performance on all three areas that were assessed, attributable to ‘an ad hoc approach to outreach and dissemination, failure to follow-up on EITI recommendations to deliver reforms and insufficient attention to the annual review of outcomes and impact’. The next Validation is due in April 2024. The EITI Board has warned that the failure to take the necessary corrective actions in the 20 areas identified may result in temporary suspension. The next Validation is due in 12 months’ time.
President’s reaction to the suspension
Guyana’s suspension from the EITI provoked quite a reaction from the President. In a video statement released on 22 February, the President in his usual combative style stated that for four months the 12-member MSG held up the terms of reference (TOR) for the Independent Administrator. He then sought to blame two civil society MSG members for the present state of affairs and asserted:
This begs the question whether there are persons on that group with ulterior motives…One or two persons cannot drag an entire country and its credibility at stake. No. I made it clear to the [EITI] Secretariat that this will not reoccur in the future, and that persons will be exposed and held accountable.
This government stands resolute and strongly behind every single institution that promotes transparency and accountability. We will spare no effort in advancing transparency and accountability in everything we do.
Response to the President’s reaction
In a letter to the President released to the public on 27 February 2023, the two concerned officials suggested that the President might have been badly advised about the EITI rules and procedures as regards the TOR of the Independent Administrator; and the circumstances that prompted them to abstain from voting on the said TOR at the MSG meeting of 22 February 2023. They stated that a founding principle of the MSG was to always seek consensus in decision-making and that the group had resorted to a vote only on two occasions in seven years. The officials then related the following sequence of events leading to Guyana’s suspension from EITI:
At its statutory meeting held in August 2022, the GYEITI National Coordinator requested the MSG to retroactively approve the TOR for the fourth annual report, which the Coordinator had produced;
The MSG unanimously declined to approve of the request on the grounds that: (i) the content of the TOR was seriously defective; and (ii) the National Coordinator’s submission to the Ministry without the benefit of an MSG review, input and approval is a serious violation of the EITI Standard. The Standard vests all authority pertaining to both content and process of the TOR in the MSG;
It was not the first time that the National Coordinator was deficient in his work, with the issue of the annual report being the latest example. Details of such deficiencies are documented in the minutes of MSG meetings which are part of the public record;
Following the unanimous decision to decline the request, the MSG was unable to locate the National Coordinator who was absent from his office for some four months. However, this did not prevent the MSG from proceeding with its workplan with the assistance of the Permanent Secretary and two seconded staff members to the GYEITI Secretariat, with priority being given to the preparation of the TOR;
This arrangement ‘breathed new life into GYEITI’ and the Secretariat became productive for the first time since the appointment of the National Coordinator in early 2022;
At its December 2022 statutory meeting, the MSG concluded that it was no longer necessary for the Co-Chairs to engage with the National Coordinator since the Permanent Secretary had reported that the position had become vacant. At that meeting, the MSG-Civic agreed to expeditiously conduct a performance evaluation of the National Coordinator;
Before the evaluation could have commenced, the National Coordinator showed up at the MSG meeting of January 2023. At that meeting, the MSG was informed that Minister of Natural Resources was negotiating directly with EITI for an extension of the deadline for the fourth annual report and requested the MSG’s support for this action. However, the MSG only received a copy of the letter after it had been sent;
The EITI Standard clearly states that any request for extension must be made in advance of the deadline and be endorsed by the MSG;
In late January the MSG-Civic wrote to the Minister informing him that its actions would continue to be guided by the December MSG decision; and
The abstention from voting for the approval of the TOR by the two civil society representatives at the MSG meeting of February 2023 was consistent with the position communicated to the Minister.
Since the issuance of the above-mentioned letter some two weeks ago, we are still to hear from the President. Does it mean that he has accepted that he was badly misled when he sought to berate the MSG members, especially the two members of the civic component? If so, should he not publicly acknowledge being misled, apologise to the MSG, and take appropriate disciplinary action against those who have put him in this embarrassing position?
Appointment of Independent Administrator
The recruitment of the Independent Administrator for the years 2017, 2018 and 2019 was based on public advertisement requesting eligible firms to submit expressions of interest, on the basis of which the selection was made. However, for the 2020 annual report, there was no evidence that this procedure was followed. It is understood that the contract was signed with the previous Administrator. Isn’t this a breach of the Procurement Act, considering that the contract is between the Government of Guyana and the Independent Administrator? That apart, it is normal for the TOR to be attached to the contract. Perhaps, it was for this reason that the National Coordinator sought the retroactive approval of the TOR from the MSG, which he had prepared without the involvement of the MSG.
The Independent Administrator ought to have been aware that the EITI Standard vests all authority on the MSG as regards the procedures to be followed in framing the TOR as well as its content. Was he not aware of this breach when he signed the contract? Or, was he indifferent as to the procedures to be followed? The TOR was eventually approved at the MSG meeting of 22 February 2023, with the two concerned members abstaining from voting. It could therefore not have been correct to say that these two officials held up the approval of the TOR for four months, when in fact the MSG comprises 12 members, of which four are representatives of the Government. A simple vote would have resolved the matter. As the letter to the President stated, the entire MSG declined to approve of the TOR.
Non-renewal of contract with previous National Coordinator
The previous National Coordinator, Dr. Rudy Jadoopat, was appointed in February 2017 for a period of three years. He secured a one-year renewal in 2020 and a further renewal, also for a year, in 2021. However, according to reliable sources, the Authorities were unhappy with certain MSG alternate members attending the MSG meetings and had requested Dr. Jadoopat not to invite these members. He, however, declined to do so, as it would be a breach of the rules governing the functioning of the MSG. As a result, when his contract came to an end in January 2022, it was not renewed. This was contrary to expectation, considering his outstanding performance during his five-year term of office.
The position of National Coordinator was then advertised. Dr. Jadoopat applied for the position, was interviewed, but was not selected. The Authorities reportedly argued that he was associated with the Opposition political party, the Alliance for Change (AFC), whose leader has since confirmed that this was not so. Even if he is/was closely associated with the AFC, would Dr. Jadoopat’s retention not reflect inclusive governance and the notion of “One Guyana” that the President so glowingly spoke of. Suffice it to state that there were at least two cases where the Administration retained the services of or hired persons who were closely associated with the political Opposition.
Way forward
The EITI Secretariat has reportedly extended the deadline for the compilation and publication of Guyana’s 2020 EITI report to 31 July 2023. However, most of the recommendations contained in the three earlier reports remain unimplemented. The 2021 annual report is also due in nine months’ time. Additionally, the first EITI Validation Report assessed Guyana at a low score, prompting the EITI Board to declare that Guyana may be suspended for failure to remedy the deficiencies contained in the report.
Considering the above, and putting the national interest first and foremost, the Administration should reconsider retaining the services of the present National Coordinator. Time is of essence, and with the risk of two more suspensions on the horizon, the Authorities should acknowledge that it has erred in dispensing with the services of the previous National Coordinator. Accordingly, he should be reinstated as a matter of urgency.
